He's gotta have it

No one has done more to shape modern British art. But the so-called Supercollector has as many critics as admirers. In the most revealing portrait of the 21st-century Medici, Jonathan Jones goes in search of the real Charles Saatchi
Read part two of the interview here

Charles Saatchi stands on the steps of the Marriott Hotel inside London's County Hall, looking down into the circular courtyard. In the middle of this hollow space is a turfed ziggurat, bright green in the afternoon sun. He is telling me about what lives below it: two and a half million rats. This appears to please him hugely. Two and a half million rats under the building in which he is about to open his new art gallery.

It reminds me, oddly, of a previous conversation about rats. When I spoke to the curators of Tate Modern on the eve of its opening three years ago, they told me with some embarrassment that the hordes of rats from Bankside power station had fled to a nearby council estate. Perhaps all this tells you is that if you live by the Thames, you'd better not be scared of rats. But I can't help thinking that the two contrasting images - Saatchi gloating about all his rats and Tate Modern vanquishing theirs - represent two versions of art about to do battle beside the river: the Tate's high-minded vision of a politicised and serious contemporary art, and the rather more ratty and gothic version in the collection of Charles Saatchi, with its rotting cow head, dead shark, child murderer and porn cuttings.

From afar - and the notoriously reclusive collector has gone out of his way to ensure that most perceptions of him are from afar - Saatchi can seem a sinister, controlling, calculating figure. Up close he is very different - a man of passion and enthusiasm, a bit of a romantic, at least about artists and rats. With all the myths that surround him, he seems to have the excessive quality of a character in fiction: the Great Gatsby or the Last Tycoon, perhaps. Or, as his harsher critics would have it, the sinister Kurtz from Heart of Darkness.

Charles Saatchi is a man who assiduously cultivates his own myth. Removing yourself from the ordinary channels of communication, refusing interviews, absenting yourself from openings and parties is not so much normal shyness as a way of producing narratives of power and influence. In the past few years, as some in the London art world have claimed he was losing his sure touch as a discoverer of young art, he has taken steps to ensure that his reputation as the man who discovered Damien Hirst is written into history. Now he is about to unveil a monument to himself as patron of modern British art.

When rumours first circulated that Saatchi planned to close his London gallery in St John's Wood and open his own museum in County Hall, a brisk walk upstream from the colossally successful Tate Modern, the very idea seemed stupendous. Saatchi's new gallery is an open defiance of Tate Modern and Tate director Nicholas Serota; it sounded megalomaniacal even for him.

But he meant it. Now the classics of British art in his collection are displayed in the wood-panelled debating chambers and corridors once filled with the cigarette smoke of huddled councillors. It looks good. Saatchi has the best collection in the world of British art from the past 15 years - a period in which British artists, notably Damien Hirst, Rachel Whiteread, Tracey Emin, Gary Hume, Sarah Lucas, Chris Ofili and latterly Jake and Dinos Chapman, were at the forefront of international art in a way not seen since the early 19th century. There is no question that Saatchi beat public collections to the best of this stuff. "Something went wrong with the Tate," says Edward Booth-Clibborn, a fellow advertising man turned art publisher who has known and admired Saatchi since the 1960s. "Somebody went to sleep. How is it that an individual has this collection?"

It's a good question. Who on earth is this man so confident of his taste (though he claims he has no taste) that he is launching a private museum of modern art?

I spent more than two hours in Saatchi's company, during which he led me around the new gallery then to the Marriott bar, and we had a wide-ranging conversation about art and collecting, but it was explicitly "not an interview". He was warm, if shy, wearing a baggy white shirt, smoking a lot. Now I know him, he intimated, I could call any time. Except that he neglected to give me his number.

Since the late 80s, Young British Art has been both admired and hated for its outrage and gutter heart. Saatchi started collecting it almost at the very beginning, and if you want to see Hirst's shark, Emin's bed, Marcus Harvey's portrait of Myra Hindley, Ofili's Holy Virgin Mary - if you want to see the works that caused the rows - this is where they are. But does this mean that Saatchi is the true begetter of modern British art, that it could not have happened without him?

Here, as with everything else about Saatchi, myth and reality are ornately entwined.

Picture this. The owner of an art gallery is just closing up for the evening, the sun setting on a quiet London street. Business, too, has been quiet. Just then, a black Rolls-Royce sweeps up. Out gets a man in tennis shorts, accompanied by "this beautiful blonde girl in a mink coat". By the time he leaves, Saatchi has bought four paintings and asked the dealer to provide him with catalogues on all the artists he represents. Over the next few years they will do a lot of business together.

It's a scene that would be repeated time and again in the years to come. This particular evening must be in 1973, when the Saatchi Collection was just taking off. In the future, the Rolls would nose through mean streets in Hackney and Tower Hamlets, and artists just out of college would see their entire exhibitions at small galleries in terraced houses and warehouses bought lock, stock and barrel. The blonde would disappear; so would many artworks, sold to make way for the collector's latest enthusiasm. Saatchi, says Nicholas Logsdail, one of London's most influential art dealers and the narrator of this particular story, "has got this impulsive craziness about him".

That day in the 70s when Saatchi rolled up to the Lisson Gallery was, according to Logsdail, the beginning of Saatchi's infatuation with the New York minimalist art of Donald Judd, Carl Andre, Dan Flavin and Robert Ryman. These were the artists that Logsdail represented, and these were the artists of whose difficult work Saatchi would become the leading private collector. Before he was notorious as the patron of Damien Hirst, he created, with his first wife Doris Saatchi (the blonde), a museum-quality collection of minimalist art shown at the appropriately cool, white gallery they opened in 1985 at 98a Boundary Road.

Saatchi fell in love with Andre's floor arrangements of tiles and bricks, with Dan Flavin's neon light pieces, with this art of mute objecthood. Logsdail had trouble persuading him about the more conceptual Sol LeWitt; it took a weekend's discussion and showing of catalogues in 1974 before Saatchi phoned at 6am one Sunday to say he wanted to buy one of LeWitt's major works immediately.

If you read published biographies of Saatchi, however, you will read that Charles and Doris's "first Sol LeWitt drawing was acquired in 1969 for £100" - five years earlier. Wires have obviously got crossed somewhere. And the more I tried to find out about him, the more I found that every fact is also a fiction in the bottomless pool of Saatchi myth.

The published, more or less reliable facts about Charles Nathan Saatchi are as follows. He was born in Baghdad in 1943, the son of a successful Jewish textile merchant. When he was four years old he came to Britain with his parents; he has lived in London almost ever since. His brother Maurice was born in the suburbs of Baghdad in 1946. They left Iraq in an exodus of 120,000 people at a time of increasing persecution of the country's ancient Jewish population. While the move to Britain was not easy, their parents managed to once again build a prosperous business, and the family lived in a large house in Highgate, north London. At school Charles did poorly; he didn't go into higher education and appears to have more or less drifted into the advertising industry, his real enthusiasms at the time including cars and poker.

Saatchi was a gifted copywriter and worked with some now famous names - including the film director Alan Parker and the producer David Puttnam - at a time when advertising was becoming more proud and self-conscious in the pop art climate of the 1960s. Puttnam and Parker thought him a good enough writer to encourage him to follow them into the film business, and he did try to write screenplays for Puttnam; one scenario, reportedly developed into a Parker script, was filmed as SWALK. This 1971 film is also known as Melody, under which title Halliwell's film guide describes it as a "tough-sentimental teenage comedy-drama of little interest to adults".

But wait. We have barely got into the 1970s and the plot starts to thicken. When I read about Charles's almost-happened film career in The Brothers, Ivan Fallon's 1988 business history of Saatchi & Saatchi, I was fascinated. It raised the possibility of another Charles Saatchi altogether, the life that might have been - and as it has entered the Saatchi mythology, it does seem to have been a possibility. I asked Parker how he remembers it. Very differently from the received version, it turns out.

"In 1968-9," Parker said, "Charles and David Puttnam had aspirations of going into the film industry. Charles and Puttnam took me to lunch at a Greek restaurant in Charlotte Street and told me their notion of getting involved with film and persuaded me to write a script. Charles was going to write one as well. I duly wrote my screenplay and Charles wrote his. Puttnam and Charles eventually went to the US to sell the scripts. My script was picked up; Charles's wasn't. Hence Charles was instantly disenchanted with the film business and announced that he would start an advertising agency with his brother.

"The rest is history. Charles did not write the 'scenario' for my script. He had no involvement with it. He might have had some involvement financially in the film due to his relationship with Puttnam, but by the time it got made, he had long since lost interest in any notion of being in the film industry."

Once again, the Saatchi story turns out to be slippery. But perhaps the most fascinating thing about Parker's recollection is the abrupt change of heart that he says Saatchi had when his first film venture failed. That was that. This is a theme that recurs in Saatchi's story and, spectacularly, in his art collecting: radical and absolute changes of direction that are then presented as the new reality, with a denial that history exists or imposes any responsibilities. Bold self-invention.

When I meet Saatchi at County Hall, I discover yet another life that might have been: he sometimes wishes he had gone into journalism instead of advertising. He reads the papers for a long time every day, apparently - all the papers - and re-edits them in his head. It's one of his favourite pastimes.

But it was as one half of the advertising partnership Saatchi & Saatchi that he became famous in the 1970s. Combining Charles's creative expertise and his brother Maurice's brilliant business sense, Saatchi & Saatchi became known as the hardest- hitting agency in Britain. Edward Booth-Clibborn, who chaired the advertising industry's D&AD awards (won again and again by Saatchi) saw Charles as a genuinely creative copywriter: "For a long time advertising was saturated with Americanese, but he used our own language with English colloquialisms. He is a very talented writer. He ran two sorts of accounts - one sort where he made his name, and others that were the hard business." The high-profile accounts included the Health Education Council: the anti-smoking posters warning "You can't wash your lungs clean"; the image of a pregnant man used to promote contraception.

Saatchi & Saatchi got the ultimate account, however, when they were hired by the Conservative party in 1978, the first truly professional use of advertising by a British political party. In the summer of that year, amid Tory fears that James Callaghan's Labour government was about to go to the country on the back of relatively good polls, Saatchi & Saatchi came up with their notorious poster of a dole queue with the slogan Labour Isn't Working. It was a riotous success and may have contributed to Callaghan's decision to delay, thus blundering into the winter of discontent.

Once again, Saatchi's path crossed that of Booth-Clibborn, who worked - voluntarily - as Callaghan's advertising man in the 1979 election. "I wrote a letter to Callaghan saying that with the arrival of Charles Saatchi the role of advertising in politics would change. I think what was revolutionary about Labour Isn't Working was that it summed up everything with a one-liner - it was a stunning poster. They really did change political advertising."

But all this seems a long time ago. By the end of the 1980s, Saatchi & Saatchi had lost a lot of their mystique; share prices fell, they rowed with the increasingly unhappy Tory party, and an attempt to buy Midland Bank was ridiculed by financial journalists as insane hubris. It was not until 1995 that Charles and Maurice were driven out of their own company and opened a new agency, M&C Saatchi, but there is no question that by 1987-8 the Saatchi myth was dented.

At this time, too, Charles separated from Doris - Doris with her New York background, her east-coast and Sorbonne education, with whom Charles had built his collection of American art and opened his American-style gallery.

It was at this moment that he made the alliance with a ragtag group of artists barely out of college and showing their work in East End warehouses - work he immediately recognised as the biggest revolution in British culture since punk. To Saatchi, Young British Art is very like punk, which he remembers fondly, though he no longer listens to the Clash (does that mean that White Riot was on the stereo as he worked to elect Margaret Thatcher?).

Origin myths are a universal phenomenon, and Young British Art has its own Genesis, its own memory of birth. In 1988 Damien Hirst curated Freeze, an exhibition with fellow Goldsmiths' College art students and recent graduates including Gary Hume, Sarah Lucas and Michael Landy in an east London warehouse. In art-world legend it has become the equivalent to Picasso's painting of Les Demoiselles d'Avignon, or the Dada cabaret in first world war Zurich. In reality, says the critic and curator Carl Freedman, who was an intimate part of the tightly knit group that created Young British Art (he co-curated the key exhibitions with Damien Hirst and even helped to make Hirst's vitrines), it was a glorious time when they were all friends, but virtually no one came to see Freeze. "It would be interesting to know how many people saw it," he muses. And yet a lot of people remember being there.

They include Charles Saatchi. The story goes that he first encountered Hirst's work when he went to see Freeze in 1988. Saatchi was impressed not by the work - the only good things were Gary Hume's hospital door paintings and Mat Collishaw's photograph of a gunshot wound; Hirst only showed some corner constructions composed of painted boxes - but by the attitude.

Freedman can't confirm that Saatchi saw the show: "I don't think so." His memory is that Saatchi "was taken round the degree shows by Michael Craig-Martin [artist and Goldsmiths' professor] and he certainly was aware of Damien's drug cabinet pieces". But he didn't buy anything then, or at Modern Medicine, the show that followed Freeze. The first acquisition Freedman can recall was from the next show, Gambler (1990).

But the recent history of British art is fictive in a more profound sense than just who saw what when. British art is still living off the reputation it made at the end of the 1980s and the beginning of the 1990s, at the fag-end of the Tory years, when a grim vitality, a harsh poetry seemed to emerge in several media and generations. There were a lot more things going on at that time than just Hirst's Freeze; nor was Goldsmiths' the centre of everything.

In 1987 Richard Wilson's installation 20:50, a reflective sea of sleek black oil, was shown at Matt's Gallery in the East End; since 1991 it has been on permanent display in the Saatchi Collection. This was a work by an artist with a concept of architectural intervention very different from Hirst's interest in potent objects. Another classic work of the period was Lucian Freud's series of portraits of the club star and lead singer of Minty, Leigh Bowery, a collaboration between an older artist and a youth culture star that was parallel to, yet different from, the Hirst generation. The paintings were shown at the Whitechapel Gallery and you could walk from there to see Rachel Whiteread's House, a concrete cast of a house standing alone and desolate in an East End "park".

What all these artists had in common, in the years from about 1987 to 1993, was an anger, a sense of the capital as place of bitter chill and violence. After the Thatcher revolution and the abolition of the Greater London Council, Roy Porter concluded in his 1994 book London: A Social History that London was a city "yielding to disintegration. There is a new pessimism, a new anxiety about the future."

Perhaps Saatchi is aware of the irony of opening his new gallery in what was once the seat of London's local government, until Margaret Thatcher's government did away with the GLC. Or perhaps he has no sense of irony at all. As we climb the steps he taps on a rough sleeper in a tatty sleeping bag. It rings metallic and hollow - a simulacrum by artist Gavin Turk, a brand new item in the collection.

All the classic art made in London at that time - Freud's portraits of a man heroically facing death, Whiteread's monument to the demolished East End house, Hirst's shark swimming as efficiently as Saatchi himself through the waters of the free market - emerge from this London. And it was Saatchi, the man who advertised Thatcher's Conservative party, who grabbed many of the artworks that so icily described the new Britain.

Saatchi's claim to be the most daring and generous collector of this art is indisputable. He provided the perfect cool white stage in his north London gallery; he visited all the new shows and bought a huge swathe of young artists' work, some of it now forgotten. Saatchi is clearly frustrated with the Tate curators, whom he views as whingeing bureaucrats in their timid attitude to acquiring new art. He modestly believes anyone would have championed Hirst after seeing his first work - but only he did. And that's why it is Saatchi who is opening his own art museum.

The old Saatchi Gallery, the one that is now gone and forgotten, opened in 1985. It was like a space station orbiting the earth. To enter that white, curving, extensive space was to step out of the surrounding streets and be at the magic centre of the absolute present - whether Manhattan, or Mars. The absent lord of the place was therefore, by extension, imagined as a silent, remote controlling mind. It was here that Saatchi staged a series of exhibitions entitled Young British Artists, starting in 1992. It was for this space that he helped Hirst to hire an Australian fisherman to catch a 12ft tiger shark for the work The Physical Impossibility of Death in the Mind of Someone Living. In 1997 the power and excitement of this art was summed up for a larger audience by Sensation: New British Art from the Saatchi Collection at the Royal Academy, which subsequently toured to Berlin and New York.

Saatchi seemed to turn his back on the Hirst years when in 1998 he announced a new generation, the Neurotic Realists - and saw his "movement" mocked and his taste once again questioned. His opening show at County Hall has barely a Neurotic in sight, and the opening exhibition is dominated by his unrivalled collection of Hirsts.

Money might seem to be the obvious theme of the Saatchi story. And yet when it comes to collecting, money has almost nothing to do with it. Art collectors do not collect art to make money. They collect art because they have money and want to turn it into something else. That might be respectability - the longing for legitimacy that drove New York's robber barons to pour dollars into august high culture. It might be the desire to participate in creativity. But more often than not it is power the collector craves. The power to make and break reputations, to influence museums, to establish critical consensus, to change history. Whether or not that is what Saatchi wanted, whether it is even anything he thinks about, it is what he has got. It is also what we want to know about.

· The Saatchi Gallery, London SE1, opens on April 17. Details: 020-7823 2363.